The Group is Janus-faced in its orientation.
(Photo: AP)
Frankfurt An anniversary is coming up these days: Larry Fink, who was legendary during his lifetime as the CEO of the asset manager Blackrock, has been writing his “Letter to the Executive Board” for ten years now. For some, his writings are visionary glimpses into a better, ecological future, for others annoying lectures by a Wall Street capitalist.
The “transformative power of capitalism” – according to Fink’s credo – achieves more than all state regulations. The 69-year-old top manager has long been a welcome advisor to the powerful in the world. He knows the Oval Office from the inside, Donald Tump lent him his ear. In Germany, the designated CDU party leader Friedrich Merz was on the Blackrock supervisory board for a long time.
What is certain is that Fink has been setting the pace for the conversion of national economies towards climate neutrality for some time now. With gentle and sometimes also significant pressure – for example via voting at the general meetings – he gets the corporate leaders to formulate their climate goals and also to comply with them.
This is the friendly and social climate face of the world’s largest publicly traded asset manager. But Blackrock is Janus-faced and also has a side that is rather opaque. At the end of last year, Blackrock broke the sound barrier of ten trillion dollars in assets under management. This corresponds to ten percent of global gross domestic product, as calculated by the Wall Street Journal.
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For comparison: Deka, as the asset manager of the savings banks in Germany, comes to almost 400 billion euros. No question, Blackrock’s market power has grown so much. The dynamics of the cash inflows are so stark that the business model needs to be examined more closely.
Blackrock is a money machine
The company has become a money machine that spins faster and faster. Even if Blackrock always argues that it is only a custodian of customer funds, fundamental questions arise in the face of market power: Are ESG products really as green as they are labeled? How many oil companies is Blackrock invested in? To what extent do index funds – ETFs for short – reinforce the ups and downs on the stock markets?
Blackrock’s assets under management represent 10 percent of global gross domestic product.
(Photo: Reuters)
And a division of Blackrock could also be discussed. In addition to its fund business, the group finances energy transition projects and is also an asset manager for real estate, infrastructure, private equity, loans and hedge funds.
Politicians could also take on the market power in Germany – a hearing could bring more transparency and would also be entertaining. Why doesn’t someone write a letter to Larry Fink and invite him to Good Old Germany?
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